Seoul, April 30 LG Energy Solution said on Thursday it swung to a net loss in the first quarter from a year earlier, as weakening global demand for electric vehicle (EV) batteries weighed on earnings.
For the first three months of this year, the company shifted to a net loss of 944 billion won ($635.8 million) from a net profit of 227 billion won a year ago, reports Yonhap news agency.
"Lower sales of EV batteries to key customers and higher costs associated with the initial ramp-up of an energy storage system (ESS) plant in the United States weighed on quarterly performance," a company official said.
It also shifted to an operating loss of 207.8 billion won from an operating profit of 374.7 billion won over the cited period. Sales fell 2.5 percent to 6.55 trillion won from 6.72 trillion won.
Last month, Chief Executive Kim Dong-myung said the company plans to repurpose some EV battery production capacity to manufacture ESS products, in response to softer demand from the automotive sector.
Under the plan, part of the EV battery production line at its Ultium Cells plant in Tennessee has been converted to produce ESS systems.
"The company aims to increase the share of ESS and new businesses to the mid-40 percent range over time, from around 20 percent currently, to build a more stable and balanced portfolio," Kim said at a shareholders meeting last month.
Meanwhile, LG Energy Solution said this month it aims to boost productivity across its operations by 50 per cent by 2028 through artificial intelligence transformation (AX).
Dong-myung outlined the goal in a message to employees, citing AX as a critical initiative directly linked to the company's long-term competitiveness and survival. He described the global battery market as an uneven playing field, citing rivals' heavy investment in talent and strong government support.
LG Energy Solution currently operates eight battery plants -- one in South Korea and seven in the United States, Canada, Poland, China and Indonesia. Four additional plants in the U.S. are scheduled to begin operations this year.
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